REG-R.E.A. Holdings plc R.E.A. Holdings plc: Trading Update

R E A HoldingsAnnouncement

10/06/2021 09:50

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   R.E.A. Holdings plc (RE.)
   R.E.A. Holdings plc: Trading Update

   10-Jun-2021 / 09:45 GMT/BST
   Dissemination of a Regulatory Announcement that contains inside
   information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
   EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   R.E.A. Holdings plc ("REA" or the "company") - Trading update June 2021

    

   Key agricultural statistics for the 5 months to 31 May 2021 (with
   comparative figures for 2020) were as follows:

                                     2021    2020
   FFB crops (tonnes):                           
   Group harvested                303,340 288,631
   Third party harvested           95,660  81,459
   Total                          399,000 370,090
                                                 
   Production (tonnes):                          
   Total FFB processed            393,902 361,568
   CPO                             87,295  83,353
   Palm kernels                    18,565  18,044
   CPKO                             6,876   5,447
                                                 
   Extraction rates (percentage):                
   CPO                               22.2    23.1
   Palm kernel                        4.7     5.0
   CPKO                              38.5    39.8
                                                 
   Rainfall (mm):                                
   Average across the estates       1,624   1,300

    

   As noted in the annual report for the year ended 31 December 2020,
   published on 27 April 2021, the impact of Covid-19 on the group's
   operations has been limited and continues to be so.  Despite high rainfall
   and the end of Ramadan holiday period falling early in 2021, production
   since the start of 2021 has been at good levels, with the typical year end
   peak crop period extending into the first few months of the year. 

    

   Close focus on harvesting standards, backed by a range of measures
   including realignment of financial incentives to improve loose fruit
   recovery, has started to pay off resulting in a marked improvement in
   extraction rates to over 23 per cent for CPO in May.  With contractors and
   spare parts now more readily available, the modification and expansion
   works to the group's mills are proceeding satisfactorily to completion
   which should further optimise processing efficiency.

    

   CPO prices have remained firm supported by the favourable demand-supply
   balance for vegetable oils generally and, in particular, for palm oil
   where stocks have been depleted by low production in Malaysia.  Opening
   the year at $1,050 per tonne, CIF Rotterdam, after a brief drop back in
   early February to $950 per tonne prices have edged up to reach a high for
   the year to date in mid May of $1,295.  Currently, CPO prices stand at
   $1,140.

    

   The Indonesian government has continued to maintain export duty and levy
   at the high levels introduced in the latter half of 2020. The average
   selling price for the group's CPO for the five months to the end of May
   2021, on an FOB basis at the port of Samarinda, net of export levy and
   duty, was $683 per tonne (2020: $540 per tonne).  The average selling
   price for the group's CPKO, for the same period, was $1,006 per tonne
   (2020: $650 per tonne).

    

   The group's stone and coal interests have seen some positive developments
   since the start of the year.  The andesite stone concession holding
   company, ATP, has recently agreed an easement to permit evacuation of
   stone - a  critical pre-requisite to negotiating terms with a contractor. 
   Meanwhile, at the coal concession holding company, IPA, preparations for
   resumption of mining have continued.  Land compensation agreements with
   affected local individuals are being finalised, repairs to the 12km haul
   road from the concession to the IPA port are close to completion and the
   appointed contractor's equipment has been delivered to site.  Signature of
   an agreement between IPA and a neighbouring coal company will add port
   revenue to expected mining revenue with the coal company concerned
   expected to start coal shipments through the port in the next few weeks. 
   Discussions are under way with two other coal companies that may also
   utilise IPA's port facilities.

    

   The proposals for replacement term loan facilities to be provided by the
   group's Indonesian bankers are advancing through the bank's approval
   process.  Once these arrangements are finalised, other financing issues as
   outlined in the group's annual report can be addressed.

    

   In line with their previously stated intention to pay the preference
   dividends arising during the year subject to CPO prices remaining at or
   around the levels current when the annual report was published, the
   directors have recently declared the payment of the fixed semi-annual
   preference dividend that falls due on 30 June 2021.

    

   The group is now producing better cash flows, with CPO prices holding
   firm, and expects to report significantly improved trading results for the
   half year to 30 June 2021.

    

    

   Enquiries:

   R.E.A Holdings plc

   Tel: 020 7436 7877

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   ISIN:          GB0002349065
   Category Code: AGM
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  110607
   EQS News ID:   1206540


    
   End of Announcement EQS News Service

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